The Rise of Woke Capitalism

Jul 25, 2019 by

William L. Anderson –

In preparation for the inauguration of President Barack Obama, who recently had won re-election, Washington, DC, was festooned in flags, including the so-called Betsy Ross Flag, with 13 stripes and 13 white stars in a circle against a blue background. But that was sooo 2013, which was still an “unwoke” era by today’s “higher” standards.

The Nike Company recently planned to unveil a new sneaker in time for the July 4 holiday, a red, white, and blue air-shoe that had the image of the Betsy Ross Flag on the back. The company manufactured and shipped the shoes, but before their release date, suddenly Nike recalled all of them. Colin Kaepernick, the former quarterback for the San Francisco 49ers who became a counterculture star because he kneeled during the playing of the National Anthem before professional football games, is now on the Nike payroll, and he objected because the flag was created in 1776 — and slavery in the 13 Colonies at the time was legal. Thus, he argued, Nike would have been endorsing an era of slavery.

Almost immediately, each of the candidates running for the presidential nomination of the Democratic Party endorsed Nike’s move, claiming that the venerable flag suddenly had become the very symbol of White Supremacy. Why? Because Americans flew it in 1776 when slavery was in the land, so by that measure alone, it stands for systematic racism, and no Democrat presidential candidate wants to be called a racist.

Nike has become a leader in what now is called Woke Capitalism, which involves firms taking on the mantle of promoting the progressive version of social justice. One recalls when Google fired engineer James Darmore last year because he publicly aired his views on some aspects of affirmative action that Google practiced. Darmore’s views hardly were controversial to most Americans and he did not use disparaging language toward women and minorities, but even that was too much for Google, which openly considers itself to be a Woke company — and Darmore to be a beyond-comprehension bigot.

As I noted a year ago in writing about Political Correctness in the American workplace, many US firms have adopted a practice that is not unlike something we have seen in communist countries, such as the former USSR, the Eastern Europe countries before their own “liberation,” China, and North Korea. I was reminded of how workplaces become politicized when I was teaching at a university in China last month. The president of the school of international business hosted a luncheon for those of us teaching in his program, and when he arrived, a woman accompanied him that I assumed was his wife.

She was not his spouse; instead, she was the political officer of the Communist Party of China and she was embedded in the school. In fact, the university is full of political officers who operate behind the scenes but are there to keep party discipline. Today, companies like Nike, Google, Microsoft and others don’t need a communist party to impose their own totalitarian-like discipline upon workers. These companies are Woke and want to make sure everyone else knows it, and if someone wishes to be hired and remain employed at one of these firms, then uttering or declaring politically-incorrect thoughts either at work, on social media, or somewhere else is going to lead to being on the unemployment line. Thus, one can be sure that the ranks of these tech firms are honeycombed with informers and outright spies who are examining their colleagues and employees to see who among them might not be sufficiently pro-LGBTQ+ or pro-choice, and who should be cast out into the outer darkness for wrong thinking.

However, as Rod Dreher of The American Conservative writes, the Woke firms are not just satisfied with policing their own employees for un-Woke attitudes and thoughts. These companies also are imperialistic in pushing their social and political views elsewhere and not being afraid to use threats when challenged. For example, Dreher points out that when some states recently passed strict limits on abortion on demand, more than 200 CEOs of companies like Ben & Jerry’s, Yelp, and Bloomberg signed an advertisement in the New York Times condemning the new laws and claiming they were “bad for business.”

The focus of my article last year was the problem of businesses becoming bureaucratic in their drive for social justice, but the issues are much more far-reaching now than just the policies that govern the human resources offices of these firms. While the drive to create a workplace atmosphere not unlike what would have existed under the Stasi in the former East Germany is turning many corporations into pockets of “soft totalitarianism,” they don’t stop at their own property lines in their zeal to “reform” US society.

Nike’s snub of the Betsy Ross Flag because of alleged “slavery” connotations and the decision by Nabisco to display Oreos wrapped in coverings that celebrates transgenderism and the use of special pronouns have especially bothered Dreher, who writes:

So now the Colonial-era US flag is the equivalent of the Confederate flag for failed NFL quarterback Colin Kaepernick, whose eccentric preferences allow him to decide what kind of shoes Nike can sell.

This is the stupidest thing. Now we have to despise Colonial America to be in good graces with the Woke Police. I hope Nike loses a ton of money on this. They deserve to. Despicable people, capitulating to this crap. I respected Kaepernick’s right to protest on the field, and honestly, I’m not even mad at him for this, however childish it may be. It’s the fault of the woke executives at Nike, who are so afraid of being unwoke that they are embarrassed by their own country’s historic flag. I would walk barefoot over broken glass before I would buy another pair of Nike shoes.

Elsewhere, he says:

The cultural left has captured the bureaucracies at American corporations. One thing we hear a lot from our friends on the left is that Big Business is conservative, and would never do anything that would hurt its bottom line. Wrong! I have seen personally how companies will do politically correct things that actually hurt their business model, but that win its management pats on the back among their social cohort. These documents I looked at today assert — assert, do not argue — that the total politicization of the company’s culture is critical to its business success … and then go on to describe a program that is almost certainly going to cause major problems with teamwork, cohesiveness, and conflict. These documents are a recipe for creating intense anxiety and suspicion within the company. It’s as clear as day. You cannot imagine why any sensible company would embrace these principles and techniques, which can only hurt its ability to compete. But there it is, in black and white.

However, at least in the days recently after Nike’s pullback on the Betsy Ross shoes, its bottom line improved, according to Forbes:

Shares of Nike are rising after former NFL star and activist Colin Kaepernick convinced the company to pull its “Air Max 1 USA” sneakers from store shelves. Kaepernick’s concern over the shoe’s “Betsy Ross Flag” designs connection to an era of slavery resonated with investors, as Nike has seen a 2% stock increase and added nearly $3 billion in market value since cancelling the kicks.

Forbes continues:

Playing the long game with Kaepernick seems to be fruitful for the company amidst earlier short term stock market pain CultureBanx reported. Let’s look at the big picture, Kaepernick has been on Nike’s endorsement roster since 2011, but hadn’t been featured in one of their ads in two years before appearing in September 2018. The company received more than $43 million worth of media exposure from the ad, according to Apex Marketing Group.

Social issues and a brand’s bottom line go hand in hand for millennials. A total of 15,191 investors on Robinhood added Nike to their portfolios when Kaepernick’s ad was released, according to Business Insider. Additionally, Nielsen reported 38% of African Americans between the ages of 18 and 34 and 41% of those aged 35 or older said they expect the brands they buy to support social causes.

In other words, there seems to be a sizable group of investors that want to see this sort of thing from an American firm in which the company attacks what have been venerable symbols of the country’s existence. What was not long ago considered to be a benign American icon suddenly is labeled as a Nazi Swastika, according to commentators on MSNBC. One wonders what next will be in Woke Capitalism’s crosshairs — but it will be something that at least right now is not even considered to be controversial.

Likewise, we see no letup in the push for Woke Capitalism. Ross Douthat of the New York Times speculates that part of the leftward move for American capitalism mirrors what once was called the Treaty of Detroit, in which US automakers agreed to labor contracts with the United Auto Workers that in the long run proved harmful to those companies. He writes:

The system defined by the so-called Treaty of Detroit, the labor-management agreements struck between Walter Reuther and the Big Three automakers, was well-intentioned but also self-interested, a necessary-seeming concession to political trends that might have threatened corporate independence and profits even more.

Douthat labels the current corporate “wokeness” as being what he calls the Treaty of Palo Alto, writing:

But there are other ways to compromise besides on wages, and at an accelerating pace our corporate class is trying to negotiate a different kind of peace, a different deal from the one they struck with New Deal liberalism and Big Labor. Instead of the Treaty of Detroit we have, if you will, the Peace of Palo Alto, in which a certain kind of virtue-signaling on progressive social causes, a certain degree of performative wokeness, is offered to liberalism and the activist left pre-emptively, in the hopes that having corporate America take their side in the culture wars will blunt efforts to tax or regulate our new monopolies too heavily.

In other words, he says that perhaps some of the zealous “wokeness” of some companies is trying to keep in the good graces of lawmakers that call for the breakup of firms like Facebook and Google, appeasing them so that they will be less likely to inflict harm upon them. Perhaps that has something to do with it, but Douthat agrees that at least some of the new attitudes are the result of ideology. He writes:

Much of this signaling is sincerely motivated. I’m sure that lots of people in the corporate ranks at Delta or Alamo sincerely abhor the N.R.A., just as most of the people who demanded James Damore’s firing from Google or Brendan Eich’s ejection from Mozilla regarded both men as beyond-the-pale bigots.

But a certain amount of cynicism is also in order. It’s worth noting, for instance, how Tim Cook’s willingness to play the social justice warrior when the target is a few random Indiana restaurants that might not want to host hypothetical same-sex weddings does not extend to reconsidering Apple’s relationship with the many countries around the world where human rights are rather more in jeopardy than they are in the American Midwest.

While Douthat does have a point, we see that at least some multi-national corporations, long the target of leftist criticism, now are imposing “woke” views on employees in countries like Poland, which tends to be socially conservative. Dreher recounts the ordeal of an employee who resisted the push by the Swedish firm IKEA to celebrate day-themed holidays and was fired. Dreher also writes:

It was a beautiful summer afternoon today in Warsaw. Sitting on a terrace in one of the city’s squares, I found myself talking to an executive who works for a local branch of a US-based multinational company. When he found out that I’m working on a book about “soft totalitarianism,” he told me about the culture inside his corporation.

Like most American and Western European corporations here, he said, his firm pushes LGBT Pride heavily inside its corporate culture. It is very difficult to resist if, like him, you have religious or moral qualms about it. It is getting to the point where silence is not sufficient: you must affirm.

This new corporate workplace enforcement of limited worldviews only is different in degree than what used to pass for the loyalty oaths in totalitarian states. These “woke” workplaces remind me of religious institutions (including a few where I have taught) in which the employees had to hold to certain beliefs about Jesus, the Bible, and Christian doctrine in general. However, the purpose of those colleges was to help train people in the Christian faith; they were religious in nature, and they were run by people who held to certain doctrinal beliefs. Furthermore, like-minded people tend to self-select to such institutions.

Google, IKEA, and even Ben & Jerry’s (for all its left-wing fervor) are not religious institutions, or at least they were not established in order to better train their workers and customers in “the woke faith.” Yet, that is exactly what they are doing; the latest iterations of the Sexual Revolution serve as their doctrines and their leaders seem increasingly determined to produce something akin to a Holy Priesthood of Woke from the ranks of employees.

Whether it is affirming the latest consonant to the LGBTQ+ list, using new sets of “pronouns” to address the sexual identity of individuals, or supporting the sexualization of children, the woke corporate workplace has moved well beyond trying to help one’s employer make a profit. In fact, it seems that places like Google would rather have mediocre employees who are “woke” than excellent employees who are Christians. At that point, we are dealing with a totalitarian mentality, and free markets cannot easily coexist with such thinking.

Furthermore, many American and international businesses have become almost hopelessly politicized. When Google executives are recorded as saying they plan to manipulate the algorithms they create to influence the 2020 presidential election in order to elect the “right” candidate, we are dealing with something well beyond even the most politicized actions of companies during the New Deal when the federal government saw no limits on the desire of the Roosevelt administration to interfere with the marketplace.

Perhaps the most important question we can ask, however, is this: Can Woke Capitalism on its own become a coercive or even totalitarian force in our society? Before answering such a question (if it is possible to clearly answer it), we should recall that people on the Left have been making such predictions for decades regarding corporations and their power over Americans. John Kenneth Galbraith’s books are full of that stuff, and those of us who have reached our senior citizen years heard such claims from the alleged threat from General Motors to the power of IBM to Microsoft. Evil corporate geniuses apparently wanted to control the world — but they could not even control their own marketplaces. Nabisco may display their “pronoun” Oreos, but that doesn’t mean everyone will buy them. That should provide food for thought.

There are some caveats. Douthat writes:

In certain ways the Peace of Palo Alto won’t be fully tested until the next time the Democrats hold real power, when we’ll get to find out whether the left’s antimonopoly forays have any follow-through, whether more than a token portion of the Trump corporate tax cuts will get rolled back — or whether corporate wokeness will suffice as a concession to the new spirit of liberalism, enabling the easy post-1980s relationship between corporate America and the Democratic Party to endure.

As I see it, the verdict on Woke Capitalism is mixed. Rod Dreher sees it as an existential threat to freedom and that the coercion (adopt our beliefs or be fired) that is part of the Woke Workplace will spill into greater society and be further used by governments that have no commitment to individual freedoms. That could be the case, although no matter what sets of beliefs toward the Sexual Revolution may guide corporate boardrooms, no business firm can get away from the fundamentals of private property, prices, and profits and losses. What Mises wrote in Bureaucracy 75 years ago about the need for these things still holds, and no amount of bluster and coercion can change those facts.

It is highly unlikely that Woke Big Business on its own can turn the USA into a totalitarian society. Historically speaking, business policies have followed the lead of governments, not the other way around. At worst, firms like Google and Microsoft might aid governments in the expansion of surveillance and the implementation of tools of totalitarianism.

There is one huge difference between businesses (even Woke Capitalism) and government: business firms cannot engage in the kind of coercion that is the lifeblood of government rule. While Americans might still believe that corporations one day will rule the world, creating a Rollerball dystopia, there is a reason that such scenarios are depicted in fiction, and that is because they are fiction. Government coercion and brutality, unfortunately, are quite real. While one can fear what is happening in corporate boardrooms and executive offices, one always should fear government more.

William L. Anderson is a professor of economics at Frostburg State University in Frostburg, Maryland.

Source: The Rise of Woke Capitalism | Mises Wire

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